FSA does not equip the FSC with specific macroprudential tools
Macroprudential tools: The FSA does not equip the FSC with specific
macroprudential tools. The tools that are currently available, and that are within the
remit of BaFin, are those specified in CRD IV/CRR. Experience from other countries
indicates that such tools may not be sufficient to address certain systemic risks and
that other tools may also be needed.
However, the legislative process necessary to
deploy a new tool may last longer than desirable, especially during times of stress
when prompt action is needed. In addition, this process may itself generate
undesirable market behaviour. As a result, it is desirable to define ex ante (to the
extent possible) a macroprudential toolkit instead of waiting for specific risks to
emerge before proposing and adopting new tools.